Fresh figures from the International Renewable Energy Agency reveal that renewable electricity production will need to increase eight times faster than it is currently if it is to keep up with current demand, and that investment in renewables will need to increase by 30% to a whopping $131tn (£95tn) by 2050 if, globally, we are to avert catastrophic climate change.
With just one quarter of businesses currently sourcing 100% of their energy from renewable sources there is a big challenge ahead.
Real estate has a big role to play in meeting that challenge, through the buildings it develops and pathways to net zero it is developing. Tenants, too, must do their part, making sure that the energy they use in occupation of their buildings is as clean as possible.
John Davies, head of sustainability at Derwent London, says clean energy is a “fundamental pillar” of its ambition to be net carbon zero by 2030.
“It’s almost impossible for us to get to a net zero position without the use of renewables,” he says.
The same is true for Hammerson, says its head of sustainability Louise Ellison.
“We can’t run our assets without using power, so we can reduce our use and be as efficient as we possibly can but, at the end of the day, you’re going to have to source power from somewhere and that needs to be clean,” says Ellison. “That is forming a big part of our transition pathway around our net positive target.”
Source of the problem
How that renewable energy is sourced is not always straightforward. Buying clean contracts is one part of the equation, but not all of it. Delivering onsite energy can work for some landlords but not all, as can offsite generation.
“Some estates are better placed than others to have renewables on them,” says Ellison, adding that Hammerson has a growing portfolio of PV installations across its estate. “But it’s always going to be a minority of the total power that we consume, particularly because of the amount of power that’s required by the occupiers. So, it’s how you procure it, and it’s not enough to just be buying clean contracts because they are already in the numbers that the government is producing for carbon emissions reductions. If we are actually going to deliver what we need to deliver by 2050, there needs to be additional renewables coming in.”
If, like us, you are working predominantly, if not exclusively, in central London, it is exceptionally difficult to get any truly meaningful levels of onsite renewables onto a building to really make a dent on the power demands
– John Davies, Derwent London
For Davies, those additional renewables need to come from offsite provision. For his company, as a central London landlord, the ability to power its estate through onsite energy production is limited. Add to that its move to electrification across the estate and the demand on clean energy is only travelling in one direction.
“If, like us, you are working predominantly, if not exclusively, in central London, it is exceptionally difficult to get any truly meaningful levels of onsite renewables onto a building to really make a dent on the power demands,” says Davies. “And in the move to net zero, we’re looking at the all-electrification of buildings so we’re going to be demanding more electricity to cover the uses that gas traditionally would have done as well. So it’s all very well saying, yeah, we want [clean energy], but at the moment, outside of putting it on your own building, it’s very difficult to do that.”
Difficult unless, he says, you go offsite and see if you can generate your own energy elsewhere.
Landlord turned energy supplier
As part of its net zero carbon pathway Derwent is investigating opportunities for self-generated renewable energy on its Scottish estate and elsewhere in the UK. Plans are still at a relatively early stage, but Davies says it is important for the business to look at how that part of the estate can help deliver on Derwent’s wider business needs, particularly its net zero ambition.
Could Derwent add energy supplier to its business credentials? It is not beyond the realms of possibility and, as well as solving its own renewable energy conundrums, it could potentially service its occupiers too.
But clean energy is not just a vital step on the industry’s pathway to net zero, it is also an essential element in real estate’s engagement with the wider public.
Savannah de Savary, founder and chief executive of Built ID, has been conducting numerous consultations with communities and businesses and says clean energy is always high on the agenda.
She says that in a recent consultation with a local council, second on the list of everything that people mention was sustainable building design and using clean energy sources. That came ahead of both affordability and functionality. She’s seen it too within business and even in consultation on a big energy project off the coast of Ireland where 75% of the 6,000 who gave their view on the project wanted to see more clean energy projects in the country.
“If you want to get people to engage constructively in a project you need to make sure you ask them about sustainability and how you are going to combat social isolation,” says de Savary. “Those are two things that, regardless of demographic or geography, people care about most.”
The pathway to renewable energy provision across the built environment will inevitably be a winding one, but what is clear is that it is a path that everyone will have to tread, not only to meet the UK’s 2050 net zero goals but to be able to deliver a functional – and permissible – built environment.
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